I think any analysis of AT&T has to have a big break in 1983 with
divesture. So much of the company was changed as was its whole focus
that pre and post 1983 are totally separate issues.
Also, the divesture of Lucent and Ayaya (sp?) are a factor as well.
Stockholders did not necessarily hold on to those companies. Many
stockholders ended up with a fractional odd lot that is a nuisance to
keep and they sold it back to the company when they had the chance.
IMHO, in analyzing the long term investment value of a stock, the
spinoffs do _not_ count. They're separate companies.
To me, the question would be: After divesture one held $1,000 of AT&T
stock. Deduct from that all spinoffs net value (after-sale proceeds)
at the time of the spinoff. Determine the value of the stock when AT&T
was bought out. That is the answer.
Although the question is of historical interest only at this point
because the company no longer exists, even if the name is continuing.
Before the 1960s owning stock was primarily for the wealthy. Then,
stockbrokers decided to market small lots of blue chip companies to
small investors and everyday people got into the stock market. AT&T
was the bluest of the blue chips and was a popular stock.
Changes in the financial market have reverted a bit toward the past
where more wealthy people own individual stocks. The market has gotten
too complicated to follow by individuals, with too many machinations
going on. Individuals are more into mutual funds today. As best I can
tell, the cost of buying/selling stock has jumped much faster than
inflation. In the 1960s many people held but a single share of AT&T (I
was one of them, having received it as a gift). In later years that
was discouraged with buy backs (as I accepted, it was foolish cashing a
dividend check for 45c every quarter that I had to get my father to
co-sign).
I don't know if there are any "blue chip" companies today. The
business world seems so violatie, where today a company could be
considered rock-solid and tomorrow it's near bankruptcy. In the old
days the biggest companies had much more steadiness in the price of
their stock. Smaller companies and those in riskier ventures had more
violatility. (But there were once solid companies, like the railroads,
that fell onto hard times and investors lost out).
An old episode of Dick Van Dyke had the Petrie's investing in a shoe
store and getting involved in running it.
hancock4@bbs.cpcn.com